A real estate appraisal is needed to determine the estimated market value of a house, condominium, commercial property, vacant land, etc. It is used to assist someone in making a decision. They may be considering purchasing, selling, insuring, or lending money on a house, condo, commercial property, or vacant lot. Appraisals are also used for tax purposes to estimate how much money a property owner has to pay in taxes.

Here's a summary of some of the services a professional real estate appraiser can provide depending upon their qualifications:

Cost/benefit or investment analysis, for example, what will be the financial return of remodeling a house, condo, or commercial property

Land utilization studies

Supply and demand studies

Banks and mortgage lenders need appraisals to assist them in figuring out how much money to lend someone for a mortgage loan application. There are many different aspects of a loan application that the banker has to consider, but mortgage lenders always require an appraisal since the real estate will be the collateral for the mortgage loan.

People get very emotional and excited about purchasing a house. When they're in this highly emotional and excited state, they tend to just look at the cosmetic appeal of a house instead of the important factors. They forget that they're not buying a CAR, they're buying a HOUSE!! There's a big difference between the two. One is a normal expense everyone has to incur occasionally. The other is the biggest financial decision most people will ever make. By becoming too emotionally attached to a deal, people often pay above market value for a home. This can cost them tens of thousands of dollars in an overpriced purchase. Since a house is such a major financial decision, it's prudent for them not to take any chances. People should try to eliminate as much risk as possible.

A pre-purchase appraisal will inform people of the true market value of a house. This will enable them to make an educated and intelligent decision on whether or not to purchase the home. They will also know the approximate amount to pay for it.

Pre-sale appraisals are recommended. Before someone puts their house up for sale they should have it appraised to estimate the true market value. This will prevent any last minute holdups because of problems found during the buyers' bank appraisal. Any last minute problems will delay the sale or kill the deal altogether.

Homeowners can hire an appraiser to do a feasibility study to assist them before starting home remodeling and renovation work. The appraiser conducting the study analyzes the condition of the property and the cost of the renovations. The appraiser will then prepare an estimate of what the property's value will be after the improvements are made (the improved value will affect the ad valorem real estate tax). This information will enable the homeowner to not spend too much or too little money with the renovations. The appraiser can also investigate whether a property qualifies for historic preservation benefits from Federal and local governments.